Saturday, March 14, 2009

Celso De Los Angeles - The "Bernie Madoff" of the Philippines

Location of the Philippines
At about the same time that the Madoff Scam was hugging international headlines, a similar "Ponzi" scheme was also being investigated in the Philippine Senate. Tagged as the Legacy Scam, the Legacy Financial Group in the Philippines headed by Celso De Los Angeles, a graduate of a Jesuit-run exclusive school in the Philippines (the same school from which the president's husband came from), managed to perpetrate a "double your money time deposit program" that gypped Philippine investors to the tune of Php 24 Billion (approximately $500M). Done through a network of under-capitalized Rural Banks, De Los Angeles blatantly operated in the open, unhindered by helpless regulatory agencies, setting up operations nationwide unchallenged - and, all these done despite being in the Central Bank's watch list since 1984 for similar infractions.

As one local newspaper quoted it,

"Regulators could only shake their heads in amazement at the “aggressive marketing methods” that allowed 13 undercapitalized banks representing less than 1 percent of the country’s 1,359 rural banks, to attract a total of 12 percent of the rural banking system’s P116.5 billion in deposits." (
How he managed to perpetrate this "Ponzi" like scheme unchallenged by authorities until a Senate probe on the scam was conducted recently is no longer a mystery.
On his own admission, the vice president of the country, Noli de Castro, confessed that De Los Angeles bankrolled his candidacy in 2004. It must be recalled that no less than the vice president recommended De Los Angeles to head the National Mortgage Finance Corporation immediately after elections.(political payoff?)

Even more disturbing was the revelation made by Ricardo Tan the former head of the Philippine Deposit Insurance Corporation, who was already conducting a probe on the Legacy group as early as four years ago together with the Central Bank employees. According to Tan, he was invited by the Speaker of the House of Representatives to dinner through his subaltern George Regalado. This was what he had to say:
To my surprise, when I got there [to Edsa Plaza Shangi-La Hotel], we were joined by Celso de los Angeles,” Tan said, referring to the alleged owner of several rural banks that PDIC was investigating for unsafe and unsound banking practices.
Tan said Nograles asked him to go easy on the probe of the Legacy rural banks because of De los Angeles’ ties to several administration allies. When contacted by the Philippine Daily Inquirer, Nograles vehemently denied the report.

“Primo, give him what he wants. He needs it. He helped Kabayan (Vice President Noli de Castro) a lot,” Tan quoted Nograles as saying to him, speaking on behalf of De los Angeles, who supported De Castro during the 2004 elections.(
More disturbing developments are being exposed by the still on-going senate investigation headed by Senator Mar Roxas, who pledged he will not stop until the culprits are in jail. Witnesses are lining up, and their testimonies are revealing the unbelievable extent of corruption prevalent in the current administration of Gloria Arroyo. A SEC commissioner has been told to go on leave (take note: not dismissed, or suspended, or asked to resign as is customary in cases of such magnitude) after witnesses revealed he had accepted bribes from De Los Angeles. Congressmen and certain Central Bank officers were also identified by witnesses to be under De Los Angeles' pay off list. Certain court officials are also being questioned for issuing temporary restraining orders in favor of Legacy on petitions for injunctions against the company. The question right now is "where will the buck stop?" The cases which have been filed against De Los Angeles in the past have come to nothing!
Corruption has been a way of life in Philippine politics. This has never been made more evident than in the last 8 years that Gloria Macapagal Arroyo is the president. No less than her own husband has been tagged as a perpetrator of some of the more prominent graft cases in the country. With the press, the military, the judiciary, and the House of Representatives at her beck and call, corruption can only be expected to get even worse and more blatant in the remaining two years of her administration. The Legacy Scam case will be one of the many corruption cases that Gloria Macapagal Arroyo will leave behind as the legacy of her controversial presidency!

The clerics, the so-called 'civil society', and the pretentious patriotic businessmen who helped Arroyo grab the presidency in 2000 must by now be regretting having supported Arroyo then. Never mind her supporters in the military, the judiciary, the congress, and the senate - as they have all been sharing with the 'spoils of war' after Arroyo's rise to the presidency up to now - through cash handouts, choice government appointments, padded budgets and other perks freely handed to them by the president! Never mind the local press, as their mouths have also been gagged with gifts, payola's, and sometimes outright intimidation. In the meantime, the rights of the hardworking Filipinos like those who were duped to invest on Legacy are continually trampled, with their complaints having no chances for redress.

I doubt whether a resolution of this case can be had under the Arroyo administration. It is so much unlike here in the U.S. where investigators and prosecutors go about their duties as public stewards without fear or favor. Remember, Madoff was charged only last December 12, 2008. Today, he is behind bars!

As for De Los Angeles, for as long as Arroyo, and De Castro, and the other Congressmen on his pay off list are in power, he can and will always avoid incarceration using his political clout, and a battery of lawyers.

This will be a tall order for Senator Mar Roxas.

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  1. Everyone knows that money talks and this is what has been happening here. I believe everyone has a price as well and it is a crying shame that so many are willing to sell out. I hope this will tell others with corrupt minds to back off and start looking at honest business endeavors instead of trying to rip others off. Of course if they are not caught here in this existence, they will pay the price later. It won't be a pretty sight either!

    Friends 4 Life!
    Eddie Garcia

  2. cge lang, monitor lang natin latest update ng legacy. gumawa na rin me ng separate site for it thanks!

  3. very well-written.i'm bookmarking this. i'm adding you up to my blogroll too so i can easily find you back. hope to see more posts on Phil politics and business.

  4. Hi Richard,

    I really feel sorry for these people who entrusted their hard earned money to this person. Contrary to belief that their victims were just people from the provinces, I tell you, I just met a freelancer online who was also a victim of this get rich quick thing. I feel bad for that person since he needed to go back to his day job because all of his savings were invested to that thing.

    Sad to say, I do not believe that this case will prosper. Pessimistic, yes because sadly, most of the politicians are good in doing things when the issue is hot, and can easily forgive and forget when the public rage is gone.